AI Awadhi: About $720mn trapped funds remain in Nigeria

Nigeria's aviation industry has been grappling with the issue of trapped funds, with about $720 million still remaining unresolved. Kamil Al Awadhi, IATA’s Regional Vice-President for Africa and Middle East, commended the Nigerian government's efforts to address the problem but highlighted that more needed to be done. Al Awadhi remains optimistic about the government's commitment to tackling the challenges, despite the significant amount of funds still trapped. The Central Bank of Nigeria claimed to have cleared the entire backlog of verified claims, but Al Awadhi expressed uncertainty about the criteria used for verification. He emphasized that only around $60 million had been settled so far, leaving a substantial amount unresolved. In a recent interview with CNBC Africa, Al Awadhi praised the current government's proactive approach compared to the previous administration, which he described as difficult to engage with. He noted the government's engagement with the aviation industry, holding regular virtual meetings every two weeks to discuss the issues at hand. While progress has been made, Al Awadhi acknowledged that there is still a long way to go. The key theme of the discussion was the government's political will to address the trapped funds and broader structural issues in the aviation industry. Al Awadhi highlighted the government's focus on the aviation ecosystem as a positive step, noting changes in infrastructure, charges, and other related issues. However, he cautioned that addressing these challenges would not be easy. Three key points emerged from the interview: 1. Government Prioritization: The Nigerian government has shown a commitment to addressing the trapped funds and other challenges in the aviation industry. Al Awadhi commended the government's efforts but stressed the need for further action to resolve the remaining $720 million. 2. Industry Engagement: Al Awadhi highlighted the importance of engaging with both local and foreign airlines to understand their challenges and perspectives. He noted that while progress has been made, airlines continue to face operational difficulties and financial losses in Nigeria. 3. Passenger Impact: The high costs of operating in Nigeria have resulted in expensive ticket prices for passengers. Al Awadhi explained that the devaluation of funds and operational challenges have contributed to the financial burden on airlines, ultimately impacting ticket prices. He emphasized the government's role in improving the aviation industry to benefit passengers. In conclusion, while there is optimism about the government's efforts to address the trapped funds and improve the aviation industry in Nigeria, there are significant challenges that need to be overcome. The focus on establishing a supportive ecosystem and addressing structural issues could lead to a more sustainable and profitable aviation sector in the country.